Eastern State Hospital was the first state hospital in the United States treating mentally ill patients. It has enlarged its campus several times due to the increased number of patients. For this reason a new Geriatric Patients Center, called “Hancock”, (patients aged 65 and more) was established within the Eastern State Hospital.

The Center consisted of five buildings within the campus. However the problem was that the buildings were more than 40 years old. Because of this and high equipment abrasion it has become impossible to run programs smoothly and create comfortable and proper environment to increasing number of patients. The hospital was about to lose its license due to noncompliance with the requirements of the Joint Commission on the Accreditation of Healthcare Organizations. The Medicaid status was also threatened as the number of patients per room and the use of three feet tall walls in rooms did not meet regulations.

A feasibility study was carried out in order to determine the most efficient way of dealing with the problem. The outcome of the study was that it would be more advantageous and cost beneficial to build new buildings.

7. Detailed Description of Problem Resolution Strategy:

Due to the lack of public finances, a decision has been made to establish a public-private partnership (PPP) which would combine both sectors. Virginia Department of Mental Health, Mental Retardation & Substance Abuse Services (DMHMRSAS) was the representative of the public part. It treats and rehabilitates individuals and their families whose lives are affected by mental illness. DMHRSAS was approached by Gilbane Development Company to deal with the problem. It has a Public-Private Development Group which implements real estate solutions for public sector. All the predevelopment works have been done through consultation with the company and hospital staff in order to create better conditions for employees and patients.

The financial means of the predevelopment expenses were covered by the company, as well as some of the development expenses. However, the public sector also paid monthly allowances from schematic design onward. The overall cost of the project amounted to 28 million USD. The Gilbane Development Company estimated that the savings from the modern facilities would pay back the costs of construction within 13 years framework.

The facility was completed in one third of the time the project would have taken with traditional way of construction. Moreover, the total price of the project was far lower than it would have been under traditional procurement.

8. Description of the Results of the Project:

– the realization of the project of construction of a new Geriatric Treatment Center worth $ 28 million, without the high burden on the DMHMRSAS budget;